Dan Martell - Episode #5 How to Find the Perfect Technical Co-Founder w⧸ Chris Taylor, Founder of Actionable.co

00:00:00.120 I think you guys are gonna love this conversation.

00:00:03.680 We talk about understanding the economics of the business,

00:00:07.400 how to scale up, especially when you have a setup fee,

00:00:10.320 and then also a monthly reoccurring revenue model.

00:00:13.600 The quick way to network your way into other investors.

00:00:17.180 I think there's a little nugget.

00:00:18.280 If you're listening really well, you're gonna get that.

00:00:20.240 And then also, how to hire talent,

00:00:22.740 especially technical talent,

00:00:23.960 and some of my rules around identifying them,

00:00:26.800 ensuring that they're capable,

00:00:28.740 the power of 10X, especially in the technical role,

00:00:31.700 how we compensate them,

00:00:32.820 so if you're gonna build a venture-backed company

00:00:34.520 with equity and salary ranges,

00:00:37.580 trying to weed through the crazies

00:00:39.320 and the folks that are totally out to lunch

00:00:42.140 on compensation expectations,

00:00:44.500 and then really just talked about the way

00:00:48.700 that you wanna build a team, manage that team,

00:00:50.980 and communicate with them

00:00:52.600 to continue building a high-performing team.

00:00:54.760 I think you're gonna love it.

00:00:55.640 Chris is an incredible person,

00:00:56.920 great entrepreneurs have been crushing,

00:00:59.080 doing this forever.

00:01:00.080 He even shares to me where he has a private tattoo

00:01:02.480 of his company logo,

00:01:03.360 so you're gonna wanna watch this episode.

00:01:05.360 So Chris, from Toronto?

00:01:07.260 From Toronto.

00:01:08.300 Cool, what's the business?

00:01:10.860 What is the...

00:01:12.060 What is the business?

00:01:13.360 Are we going?

00:01:14.200 Oh, you can't look at the camera.

00:01:15.540 I didn't realize we were actually shooting.

00:01:16.380 All right, Jared, we gotta keep this in here.

00:01:17.920 I'm gonna start in, all right.

00:01:18.760 Yeah, so what's the business?

00:01:20.000 So the business, okay, so you're not a corporate guy.

00:01:22.420 Did you start in corporate?

00:01:23.260 Dude, I'm so corporate, I'm gonna,

00:01:25.060 I appreciate that we're gonna go there a little bit,

00:01:27.700 just so I can flex my corporate chops a little bit.

00:01:30.080 I feel like I've been tarnished the startup guy.

00:01:33.120 And no, I built an enterprise consulting company,

00:01:37.120 sold in a Fortune 500.

00:01:38.760 Yeah, so I love talking about Statements of Works

00:01:41.420 and Gantt charts and all that fun stuff.

00:01:43.380 Perfect, so you know the consulting space.

00:01:45.100 Very well, yeah.

00:01:45.940 So that's the space we play in.

00:01:47.300 Cool.

00:01:48.700 Company name's called?

00:01:49.560 Actionable, actionable.co.

00:01:51.300 And so what we do is we make learning programs,

00:01:53.800 on-site learning programs, sticky and measurable

00:01:56.200 from a behavior change.

00:01:56.960 So this is interesting.

00:01:58.020 So because we talked about this,

00:02:00.300 I had a founder's lunch today with the founders

00:02:03.340 of carnivoreclub.com.

00:02:06.920 There was another one from precisionnutrition.com.

00:02:11.680 And Catherine from, she had a corporate,

00:02:15.960 she has a SaaS business as well, it's super neat.

00:02:17.860 But the topic was around this, if I think this is correct.

00:02:22.220 This is how do you capture and train your leaders

00:02:27.700 and best practice, like is that?

00:02:29.720 Yeah, how do you show that it's working?

00:02:30.920 Because there's great consultants out there

00:02:32.440 doing really great work.

00:02:33.600 Cool, they'll come into your company, teach you stuff,

00:02:35.820 but how does that stuff get disseminated

00:02:37.500 across the organization?

00:02:38.660 Yeah.

00:02:39.500 Super neat, oh, hence the name, so clever.

00:02:42.200 Thank you, yes.

00:02:43.040 There we go, I like this, okay, cool.

00:02:44.680 So let's deconstruct the product itself

00:02:47.960 and how you guys deliver on that value proposition.

00:02:50.540 Sure, so lightweight software,

00:02:52.000 It's mostly based on text messaging.

00:02:54.140 It's sold through the consultants that we work with.

00:02:56.280 So we recruit consultants,

00:02:57.860 then they integrate actionable into their offering,

00:02:59.660 and then they bring it to their clients.

00:03:01.040 Now, are they already selling their own curriculum

00:03:04.620 and they're just using, okay, cool.

00:03:06.140 So you don't have to like give them any.

00:03:07.440 No, no, they're well established.

00:03:08.500 They do a couple mill usually.

00:03:09.500 Whatever they do, management consulting,

00:03:10.780 leadership training, et cetera.

00:03:12.240 Communication skills.

00:03:13.080 Communication, all that stuff.

00:03:14.380 I'm falling, catch me, that kind of stuff.

00:03:16.720 No, not.

00:03:17.560 Trust exercises.

00:03:18.400 We're not saying kubaya.

00:03:19.240 No, it's too much. 1.00

00:03:20.880 All right, the real shit that drives ROI. 1.00

00:03:23.020 No, I mean. 1.00

00:03:23.860 But how do you prove that?

00:03:24.700 Yeah, okay, so then, let's talk,

00:03:27.940 like I want to understand why you started this business.

00:03:31.740 Yeah.

00:03:32.580 In 30 seconds, ish.

00:03:34.060 I was a sales rep and sales manager early in life.

00:03:37.560 And just so you know, I know we've talked before,

00:03:39.760 and I'll ask you questions that I know the answers to.

00:03:41.840 Yeah.

00:03:42.680 Okay, so don't be like, 1.00

00:03:43.620 Dan's a fucking idiot and he doesn't remember 1.00

00:03:45.200 everything from our previous conversations. 1.00

00:03:47.540 But I think it'd be helpful for.

00:03:49.300 You know a lot of the Cutco guys that I grew up with. 1.00

00:03:51.620 Okay, I am.

00:03:52.400 John Rulon, Hal Elrod.

00:03:54.300 Is that where he came from, Cutco?

00:03:55.880 Yeah, yeah, yeah.

00:03:56.660 Okay, I was wondering why he keeps sending me Cutco knives.

00:03:58.540 That's why, so.

00:03:59.880 Do you think he's still getting a kickback

00:04:01.480 on all those Cutco?

00:04:02.320 Because that would be the ultimate.

00:04:03.160 He sells like a million bucks a year in Cutco knives.

00:04:04.900 So would it be safe to say

00:04:07.700 that he's making a Cutco commission

00:04:10.180 on the sales of the Cutco knives?

00:04:11.880 He's making a healthy margin on this.

00:04:13.140 That's awesome, what a great, now it all makes sense.

00:04:17.340 That's the basis of his gifting business, yeah.

00:04:19.060 Oh, snap. 0.99

00:04:20.280 Yeah, yeah, yeah.

00:04:20.880 That's cool.

00:04:21.680 I know.

00:04:22.100 So that's what I did.

00:04:23.080 So good.

00:04:23.580 Okay.

00:04:23.900 And I fell in love.

00:04:24.640 I wasn't a particularly good recruiter, which is most of that business.

00:04:27.340 Yeah.

00:04:27.520 But I was really good at retaining the people that I recruited.

00:04:29.740 Got it.

00:04:30.000 And I became somewhat obsessed with how do you retain top talent, particularly in a commission-based environment.

00:04:34.580 Yeah, because they can go do their own thing.

00:04:35.940 Totally.

00:04:36.340 And they're kids selling knives.

00:04:37.820 Like, there's not a natural attraction there.

00:04:39.420 Yeah.

00:04:40.180 Not normally.

00:04:41.040 Yeah.

00:04:41.260 And so I fell in love with that.

00:04:42.760 And so when I left that world, I really dug into what it was that led to retention of top people.

00:04:47.480 I'm sort of geeked out on that I spent 2008 reading about a hundred business

00:04:51.800 books and where the business started was I use you read 2008 you would say like

00:04:56.600 in your trajectory that was like I'm gonna I'm gonna learn yeah what did you

00:05:01.340 read I read everything from the great yeah yeah yeah all the classics totally

00:05:05.960 yeah it's like 25 yeah for sure so I started actionable books to share some

00:05:11.780 of the ideas from those popular books so that was a starting point was that

00:05:15.320 like a one like a CEO read type thing like a synopsis awesome so Blinkist

00:05:19.520 today would be the digital yeah exactly so I'm incredibly in awe of what Blinkist

00:05:23.960 did for me yeah yeah because it was never a revenue generator for us no but

00:05:28.820 it got me into the space of interacting with a lot of these authors yeah huge

00:05:32.480 yeah that's awesome so I read 2008 I interviewed 2009 traveled around the US

00:05:36.380 interviewing Seth Godin Patrick Lencioni these types of individuals dude I was

00:05:41.960 amazing. I'm jealous. That's super cool. I'm sure they would take your call down. Yeah. I'll have

00:05:46.520 to reach out. Yeah. And then I started a little consulting practice off the heels of that. People

00:05:52.020 wanted to apply what I was reading. And so I built up this little consulting practice, realized that

00:05:56.760 from my standpoint, one of the biggest challenges was you could go do incredible work, but then you'd

00:06:00.940 leave. You have to go hustle to find the next gig. You wouldn't know what sort of impact you had. They

00:06:04.420 didn't know the direct impact you'd had. And so I built this, and I'm not a coder, but I cobbled

00:06:08.760 together a team to build this lightweight software that allowed us to track the behavior.

00:06:12.560 We live in a cool world where the APIs are available, and it's really about the creativity.

00:06:18.160 Clarity, my previous company, was Facebook Connect, Twilio, and Stripe.

00:06:24.800 Yeah.

00:06:25.740 That was it.

00:06:26.680 Yeah, totally.

00:06:27.380 That's all it took to build.

00:06:27.900 You don't have to do the heavy lifting.

00:06:28.820 No, no.

00:06:29.440 All the hard stuff's been thought.

00:06:31.220 So where are you at today in regards to the software, the business, traction, just to

00:06:36.840 give context to...

00:06:38.120 Yeah, so we're doing about $100,000 a month in total revenues.

00:06:43.120 About $40,000 of that is MRR, and we have 180 consulting partners around the globe that license it to their clients.

00:06:50.960 We had a big breakthrough earlier this year where I was very focused on my own content for a long time.

00:06:55.840 Turns out other consultants don't care about my content.

00:06:57.900 No, no, but what they wanted is they wanted the technology, right?

00:07:00.880 So we've stripped it so that they can put their stuff on it, quasi-white label.

00:07:03.920 and that's okay so there was an iteration where you did sell them the thing that they then use

00:07:09.680 your technology so so and i see this a lot with kind of like thought leader i call it like

00:07:14.000 traditional sass versus thought leader sass thought leader sass essentially is wrapping

00:07:18.280 their thought leadership framework in their software yeah but then it kind of doesn't allow

00:07:23.300 them to really ask is there value in the core software as a standalone sass yeah because you're

00:07:29.680 not sure which thing they bought.

00:07:31.060 Did they buy the training?

00:07:32.400 Did they buy the software?

00:07:33.520 So you pulled away the training,

00:07:35.840 allowed them to put their own content in there,

00:07:37.780 still leveraging your platform now.

00:07:40.120 Now when you say 40K out of 100K,

00:07:41.960 so does that mean that there's a setup fee or,

00:07:45.300 so that's what it is?

00:07:46.140 Yeah, so it's a licensing and setup and then they sell.

00:07:48.820 Cool, and then what's the kind of lifetime value

00:07:51.560 or retention for a customer for you guys?

00:07:53.700 I have no idea.

00:07:54.860 Okay.

00:07:55.700 Yeah, I mean we're about 18 months into corporate sales.

00:07:58.140 We see about $100 a year in clean revenue to actionable,

00:08:01.280 profit to actionable per employee.

00:08:02.840 Yeah.

00:08:04.480 How many years they will continue to use the platform

00:08:06.500 is sort of an unknown at this point.

00:08:07.320 Okay, so it's typically the customers

00:08:09.460 that are buying actionable,

00:08:11.540 and they're really probably not even,

00:08:12.720 like they're buying it as a byproduct

00:08:14.400 to one of your partners, selling it to them.

00:08:18.040 What size a company on average would be investing

00:08:20.540 with one of your, would you guys call them partners?

00:08:22.540 Yeah, they're partners.

00:08:23.380 Yeah, so they're investing through one of your partners.

00:08:25.860 What size of companies traditionally

00:08:27.580 is it Fortune 2000, is it 50 to 200 employees, what's the...

00:08:31.180 No, it's usually more, so they're usually 1,000 employees plus,

00:08:33.820 but they're starting with a smaller group.

00:08:34.840 I mean, you've got, just so you know, three years wouldn't be an overly optimistic LTV on that.

00:08:40.520 Okay.

00:08:40.840 Yeah, like, I mean, if they're going to invest on deploying to that level of employees,

00:08:44.540 are most of them, so it's 1,000 employees, but how many of those employees would actually get actionable?

00:08:49.840 Well, yeah, so they're starting with really small pilots, right?

00:08:51.660 Yeah, that's usually it's a departmental, yeah, and then if they get success, they're going to roll it out.

00:08:55.780 Do you guys offer, from a tiered pricing point of view,

00:08:58.520 I know I'm getting super nerdy on the economics,

00:09:00.280 but it's just, it helps me understand

00:09:02.380 that we can go wherever you need to.

00:09:04.520 Do you offer site-wide licenses for your partners

00:09:07.300 to sell a 50,000 person organization?

00:09:10.060 No, and this is one of the things

00:09:11.280 that we've been butting up against.

00:09:12.400 We don't even sell on a per user basis.

00:09:13.980 We sell on a team per instance basis,

00:09:16.700 and it's confusing to the client.

00:09:18.500 Totally, and you're probably leaving

00:09:20.060 a lot of money on the table.

00:09:21.720 I think so, yeah.

00:09:22.480 For sure.

00:09:23.980 I got it, man.

00:09:25.480 I work with a lot of clients that have this kind of model.

00:09:30.480 Yeah.

00:09:31.480 And I've seen those challenges, so I kind of get context.

00:09:33.580 Where do you want to go?

00:09:34.580 What would make this an incredible conversation for you?

00:09:37.680 So we're in an interesting transition point.

00:09:39.580 I started this company nine years ago.

00:09:41.180 It's gone through a lot of iterations.

00:09:42.580 Yeah.

00:09:43.580 Was that nine years with the books?

00:09:44.580 Yeah.

00:09:45.580 Okay, cool.

00:09:46.580 That's when we started that.

00:09:47.580 Yeah, yeah, yeah.

00:09:48.580 That's super neat.

00:09:49.580 Yeah, so it's been fun and it's my life.

00:09:50.580 I'm fully in it.

00:09:51.580 Yeah.

00:09:52.580 Do you have a tattoo?

00:09:53.580 Yeah, but I'm not going to show it to you.

00:09:54.680 Okay, cool.

00:09:55.540 All right, that's dedication.

00:09:57.020 I did not.

00:09:58.160 We change our logo too often.

00:09:59.600 Yeah, that's why you just go with a nice font.

00:10:03.040 Call it a day.

00:10:04.460 So we have always outsourced our dev.

00:10:07.060 Always.

00:10:07.620 I started the company with $2,500, and so everything was that.

00:10:10.820 And we're in this transition point now.

00:10:11.980 We want to start building our own internal team.

00:10:14.120 And so I've been actually through you indirectly.

00:10:16.400 I ended up connecting with Chad at Oisler.

00:10:18.940 Osler?

00:10:19.620 Osler.

00:10:20.320 Yes.

00:10:21.120 The lawyer.

00:10:21.720 Yeah, the lawyer.

00:10:22.220 And then he's connected me with almost every VC in Canada, which has been great.

00:10:26.240 So we're going through that conversation.

00:10:27.500 But it's a fascinating place where, I think it's fascinating, we've got a number of firms

00:10:32.260 that, you know, there's the ones that say, tell me later.

00:10:34.840 Chad's a good dude.

00:10:35.120 He's just PS.

00:10:35.980 Well connected.

00:10:36.400 Yeah, I really like him.

00:10:38.000 And he hustles, man.

00:10:38.940 Like, I get emails from him at 2 a.m. all the time.

00:10:40.360 That's, you know, it's funny how, like, I test vendors often as just like a side note.

00:10:45.300 And one of my tests is a weekend email.

00:10:47.560 Oh, yeah?

00:10:47.980 And they don't know it.

00:10:49.020 But, yeah, for sure.

00:10:49.680 I mean, and look, I don't expect everybody to work on weekends.

00:10:53.100 Sometimes I do.

00:10:53.880 You know what I mean?

00:10:54.820 Because I mean, especially for certain people like accounts, lawyers, immigration people,

00:10:59.520 you kind of need some responsivity there. 0.98

00:11:01.140 Yeah, that's when the shit hits the fan is outside of worked hours. 0.97

00:11:03.260 So that's super cool. 0.97

00:11:03.980 So it helped you kind of network into the investor space.

00:11:06.480 Yeah.

00:11:08.000 We're too early for some, we're too late for others.

00:11:10.080 Yeah, and so one of the things you're saying is transitioning to an in-house dev team.

00:11:13.420 Is that one of the constraints or one of the challenges that they're coming up with?

00:11:16.360 It is, and it's this chicken-egg thing, because in my mind, I need the cash to properly finance

00:11:20.360 a good dev team, right?

00:11:22.360 Yeah, so I mean, my analogy to outsource, you know, in the early days, I'm a big fan

00:11:28.360 of outsourcing innovation too.

00:11:31.360 So if you said, I think I've got this interesting growth channel, but my team's kind of strapped

00:11:36.360 with product, how do I do it?

00:11:37.860 I would say outsource it.

00:11:39.360 Literally going Upwork, find some programmer in Eastern Europe and say, hey, here's this

00:11:43.860 this crazy idea, go pull these APIs together,

00:11:46.120 and show me what the data looks like.

00:11:47.200 I do that today, I've done it.

00:11:48.780 But it's starting from a core of,

00:11:49.880 your core product is internal.

00:11:51.840 It's, yeah, so I've always eventually brought it in-house,

00:11:55.900 but I'm okay starting with outsource.

00:11:59.000 But I'm talking like okay for six months.

00:12:02.020 Right, not nine years?

00:12:03.080 Not nine years, nope, nope.

00:12:04.580 And really it's the analogy is like,

00:12:06.600 you could start a restaurant by hiring a part-time chef,

00:12:11.820 and teaching you how to cook,

00:12:12.820 and you could be following a recipe.

00:12:15.060 But at a certain point for a restaurant

00:12:16.660 truly to build escape velocity,

00:12:18.240 especially if you wanna compete

00:12:19.580 in such a competitive space,

00:12:21.360 you need a world-class chef as a business partner.

00:12:23.320 You can still be the business side,

00:12:25.160 the marketing mind, et cetera,

00:12:26.700 kind of the vision for the restaurant,

00:12:27.940 but you need that chef in the kitchen. 0.54

00:12:29.680 And to me, that's the same relationship I see.

00:12:32.000 There's no software companies at scale.

00:12:34.980 But the good news is there's a ton of companies

00:12:37.480 that I coach that do 12, 15 million a year

00:12:39.800 that are non-technical that start in the same scenario.

00:12:42.400 So there's good precedence for that.

00:12:46.160 I think the migration plan, if that's the question,

00:12:49.940 is that kind of like, how do I migrate?

00:12:51.760 I mean, I know I need the money to do this.

00:12:53.400 Yeah, and it's also, I mean, you know,

00:12:54.880 not knowing what I'm looking for, where to go, I guess,

00:12:57.240 in regards to finding,

00:12:58.640 am I still calling you a technical co-founder

00:13:00.360 even though we're nine years in?

00:13:01.440 Yeah, so my rule on like the founding side

00:13:04.220 is I call it founding team member.

00:13:05.860 And what I've always said about that is,

00:13:07.480 you know, in the early days,

00:13:08.320 especially if you're high growth,

00:13:09.400 like Clarity was the same scenario for me

00:13:10.920 where I went literally from an idea to revenue pretty fast

00:13:16.520 that I couldn't slow down to bring in a technical co-founder

00:13:19.540 and I tried and I wanted to,

00:13:21.500 but the truth was the people I was reaching out to

00:13:24.540 were either between startups

00:13:26.580 that they just sold to Facebook or to sales,

00:13:28.480 but you wanna build the best team

00:13:30.600 and just trying to coordinate,

00:13:32.980 one guy sold his company to Google

00:13:34.960 and he's still there and Facebook,

00:13:36.860 whatever they're paying him is not enough

00:13:38.580 because he is one of the smartest people in the world.

00:13:41.180 And I'm a big fan of ask for advice

00:13:43.960 and slowly work together.

00:13:45.160 And I was trying to go through this process

00:13:46.920 and then all of a sudden the VCs were coming in

00:13:49.140 and I was like, how do I slow that down?

00:13:50.880 So then I was like, well, I'll raise the money

00:13:52.060 but I won't announce it.

00:13:53.740 Because certain people want to be part of the founding idea.

00:13:58.180 So those would be what I call co-founders.

00:14:00.680 Now, what I like to use is the founding team member

00:14:02.840 because I believe that there's certain people

00:14:04.580 that are super critical to the realization of your dream,

00:14:09.100 and that would probably be more to where you're at,

00:14:11.340 where it's like, I've done really well so far,

00:14:13.360 we're essentially a million ARR type of business,

00:14:16.160 and we want to now kind of build professional management

00:14:20.380 around our technology stack,

00:14:21.980 and I need a founding team member to do that,

00:14:23.800 and I'm willing to be long-term general.

00:14:27.220 I think that that's the big part is too often,

00:14:30.320 if you're gonna build a venture-backed business,

00:14:32.140 Like, what's unique about that versus bootstrap

00:14:35.240 is you actually have an ability to incentivize people

00:14:40.140 in a meaningful way, right?

00:14:41.640 Like, I hear people all the time,

00:14:43.040 they say, I wanna do profit sharing in my company.

00:14:44.440 It's like, no you don't.

00:14:45.840 You just wanna essentially do bonus structures

00:14:48.100 that's tied to their output.

00:14:50.560 You essentially wanna turn everybody into a salesperson

00:14:53.260 because you're just not feeling like

00:14:54.640 they're self-motivated enough.

00:14:56.080 Like, you know what I mean?

00:14:57.140 It's not profit sharing.

00:14:59.480 Profit sharing means let them keep getting paid

00:15:01.500 what they're doing today and pay them that salary.

00:15:03.680 And at the end of the year, look at your profit

00:15:05.080 and write them a check from that.

00:15:06.480 Most of them don't want to do that, so anyways.

00:15:07.960 But I love the idea of venture-backed startups

00:15:09.700 because you're actually giving some equity

00:15:12.860 at a discount in the future will be worth more,

00:15:15.400 especially if you start down the fundraising path

00:15:17.460 because as a byproduct of raising capital,

00:15:19.780 they're setting the new valuation,

00:15:21.200 which argument, like every time you raise more money,

00:15:24.040 there's a higher valuation, the employee stock options

00:15:27.240 should be worth more.

00:15:28.240 So, I think if you're, are you willing to be somewhat, like, open to giving equity to?

00:15:35.880 Yeah, yeah, yeah.

00:15:36.360 Yeah, I'm happy to.

00:15:37.560 I mean, what's, I appreciate there's a massive range within that for a founding member versus a co-founder.

00:15:41.780 I'll just tell you what I did with clarity.

00:15:43.940 I mean, even, because I ended up raising $1.6 million.

00:15:46.520 Right.

00:15:46.900 And I found a person that was kind of further, like, they came after the fact of raising the capital.

00:15:51.840 Yeah.

00:15:52.440 And I kind of decided I'm willing to give up to 10%, 10% to 15%.

00:15:56.540 At the end of the day, for the right person to lead my engineering team, and here's what

00:16:01.980 I mean by lead.

00:16:03.420 When they get hired, they can bring five other incredible people.

00:16:07.520 That's rule number one.

00:16:08.780 So if you just hire a really great technical person that doesn't have a bench, that's

00:16:13.040 why you want to find people who've been in the industry for like 15 to 20 years that

00:16:16.600 have built teams that their teams are just looking for an opportunity of saying, what

00:16:22.180 if we started from scratch again?

00:16:23.580 How cool would that be?

00:16:24.580 Because that's what you're saying.

00:16:25.580 It's like, look, come in and rebuild the platform, right?

00:16:28.480 Take what we've got, build the, you know,

00:16:30.260 whatever you gotta do, but take your Navy SEALs team

00:16:34.200 that you've cultivated over the years,

00:16:36.100 that you guys message every Saturday night

00:16:37.860 about like what cool framework they're geeking out on,

00:16:39.960 because that's hopefully what they're doing,

00:16:41.900 and come create magic in my company.

00:16:44.880 And I think those people exist, and I think most of them,

00:16:47.640 it's funny, like IBM's locked up a lot of them,

00:16:49.680 but I still think they're at the point,

00:16:50.980 like I have friends that still work at Blackberry Rim,

00:16:54.980 You know what I mean?

00:16:55.460 Like they're still there

00:16:56.480 and they're just on another level of brilliance

00:16:59.120 and I feel like just somebody needs

00:17:01.300 to just have that conversation with them.

00:17:03.400 So I would say I would be open.

00:17:08.060 You know, you guys are well along.

00:17:09.580 You've got product market fit-ish.

00:17:11.060 You've got a proven track record as an entrepreneur.

00:17:13.900 If they want to come in

00:17:15.420 and be part of an exciting team

00:17:16.880 and you're willing to, you know,

00:17:18.420 pay them not market wage,

00:17:19.820 like they're not going to make

00:17:20.640 what they're making today.

00:17:21.960 But, you know, 70% less than that

00:17:23.940 plus 10 to 15% equity,

00:17:25.940 vest it over four years,

00:17:27.060 you definitely want to do vesting on it.

00:17:29.760 Then that's not crazy.

00:17:30.840 Like I'm a big fan of being long-term greedy.

00:17:33.860 Like if I'm bringing in venture partners

00:17:36.020 and they're gonna throw in 5 million bucks,

00:17:38.060 10 million bucks and take 25, 30% of my company,

00:17:41.500 then I should be willing because that capital

00:17:43.720 and the output of what I can do with that

00:17:45.960 and the right hire should be like relationally accurate.

00:17:50.380 Like if I give up 10% to an engineer

00:17:52.520 that's going to bring in other great guys

00:17:53.980 and they're going to build this stack

00:17:54.880 that's going to allow me not to have to worry

00:17:56.160 about infrastructure and product releases

00:17:58.580 and features and just totally creating

00:18:01.020 an incredible product

00:18:01.740 because you're probably more of a salesperson,

00:18:03.560 marketing, like that I can now go sell

00:18:05.840 and know that no matter what I sell,

00:18:07.160 you can deliver on.

00:18:08.400 That's the Steve Jobs, Steve Wozniak relationship.

00:18:10.960 And I think that is,

00:18:12.300 like I had those people in my companies

00:18:14.080 and that was, I mean, I remember.

00:18:16.800 What are they doing now?

00:18:17.500 Are they available?

00:18:18.720 No, they're all,

00:18:19.500 so the cool thing about my background

00:18:21.180 is every one of them started their own company.

00:18:22.780 That's amazing.

00:18:23.260 That was my commitment.

00:18:24.120 Come work with me.

00:18:25.120 I will not only work with you to create a lot of wealth in your life,

00:18:28.500 but I will also teach you how to think about entrepreneurship.

00:18:31.420 Love that.

00:18:31.960 Yeah, I just, I mean, that's probably the thing I'm most proud of

00:18:34.280 is from my company Spheric to Flowtown to Clarity.

00:18:38.560 Most of my team have gone on.

00:18:40.640 And probably the sourcing I use.

00:18:43.300 I definitely pulled people that had that entrepreneurial bent.

00:18:49.040 So you've got to be a little crazy to come join a startup.

00:18:51.220 Yeah, but I think that's what they want.

00:18:53.260 I always told people, especially maybe not my core founding team people, but other hires

00:18:57.220 is come dedicate at least three years of your life to this mission and if you do that, I

00:19:03.920 will do everything in my powers to make sure that you achieve your dreams in life.

00:19:07.320 And I do that today.

00:19:09.760 And where were you sourcing them from, because do you have a developer background?

00:19:12.660 Yeah, I started coding when I was 17.

00:19:16.800 But even without that, I would just, I source off GitHub.

00:19:22.580 Back in the day, you used to be able to get, I don't think you can anymore, you used to

00:19:24.860 get the email.

00:19:25.860 I actually built this whole growth hacking scraper.

00:19:28.560 Of course you did.

00:19:29.560 Yeah, of course.

00:19:30.700 And I outsourced it to Upwork, back then it was Elance.

00:19:33.780 And so you could get all the emails and you can get, it was really cool because you can

00:19:37.560 get their code commitments over, you can actually get, there was a way for you to quantify or

00:19:41.700 qualify how good of a programmer they were.

00:19:45.140 And then in a geography, so then there was arbitrage on hiring from, I remember one guy

00:19:49.980 like St. Louis.

00:19:50.980 He's like, what are your salary expectations, 45k a year, awesome, he's easily worth 150,

00:19:56.820 we're gonna pay all your relocation expenses, move you to San Francisco and pay you 60.

00:20:01.840 So there's some really cool opportunities like that.

00:20:04.840 But I always say go to where they hang out.

00:20:08.380 And I know where they hang out.

00:20:09.460 I know where they hang out in this city and I know where they hang out in every city is

00:20:11.900 they go to the user groups, they go to the technical events, and what they don't want

00:20:15.940 is some business guy showing up saying, you know, glad-handing, and like, here's my business

00:20:19.820 car, I need to hire. What they want is somebody to be passionate about their product, to show

00:20:24.500 them that they actually have traction, and that for the right person, there's an incredible

00:20:28.200 opportunity, and build that pipeline of potential hires. And the truth is, you know, you might

00:20:34.700 have to talk to a lot of people to find one or two really high-quality candidates, and

00:20:38.940 actually work on them with something.

00:20:41.460 You know, I'm a big fan of, I can't work with you until I work with you.

00:20:44.100 So one of my rules is I always map out like a 10-hour project.

00:20:47.120 So for a technical person, one of my go-tos for a long time was use the Facebook API,

00:20:54.580 analyze this Facebook group, and then tell me which members in that group are the most

00:20:58.140 engaged.

00:20:59.140 Interesting.

00:21:00.140 Right?

00:21:01.140 The API was there.

00:21:02.140 I mean, you need to know a little bit about APIs, but today, if I was thinking of like

00:21:06.140 a fun technical project, I would probably say,

00:21:10.580 let's use the, I would probably go to Bitcoin, right?

00:21:13.680 Here's what I would probably do.

00:21:14.840 Recently the price dropped by like 30, 40%.

00:21:17.500 I would have them analyze who lost the most money

00:21:20.880 in the short amount of time, right?

00:21:22.640 By looking at the transaction size,

00:21:24.400 because it's all public, and when the price dropped.

00:21:26.780 So who executed the $500,000 purchase

00:21:30.440 the 30 seconds before the price dropped?

00:21:33.040 Right, right.

00:21:33.880 Because then there was no liquidity, 0.95

00:21:35.120 and they're like, oh shit, I'm in this transaction, 0.93

00:21:37.440 I can't get out of it, so I don't know. 0.96

00:21:39.880 Because why, it has nothing to do with my business.

00:21:41.980 So that's the whole point, do something that's not.

00:21:43.520 It has to be not, because then there's the argument

00:21:45.900 of how much should I pay them for that test project,

00:21:47.960 and my whole thing is, hey, this is an opportunity

00:21:50.260 for us to learn how we work together.

00:21:52.720 Most people do it as just a way to kind of,

00:21:55.560 and we'll work together, like I'll help you

00:21:57.360 with interface stuff, I'll give you feedback.

00:21:59.100 Because that's what you want to test in those relationships

00:22:01.560 is how do you communicate?

00:22:03.780 Like, you know, unfortunately, a lot of people

00:22:07.040 have bad habits where you ask them to do something,

00:22:08.940 they go away for 10 hours, and they show up, 0.99

00:22:10.240 and they go, ta-da, and you're like, ta-da, that sucks.

00:22:13.280 Ta-da, that actually is not what we talked about,

00:22:15.660 and I don't know where you took this conversation

00:22:17.880 and went left, so that, unfortunately.

00:22:21.420 But hey, wouldn't you wanna know that

00:22:22.940 before you hire them?

00:22:23.780 Absolutely.

00:22:24.620 Because that's a habit.

00:22:25.520 Like, that's usually something ingrained.

00:22:27.800 If you came from the management consulting

00:22:30.480 or enterprise kind of consulting space,

00:22:32.700 there's people from that industry,

00:22:34.600 like so let's say like technical sales engineers,

00:22:37.600 they have a different level of approaching teams

00:22:39.860 because they understand like there's a check-in,

00:22:42.520 there's a hey, this is what I heard you say,

00:22:44.240 let me know if I'm on the right track.

00:22:45.600 Not like getting confirmation at every step,

00:22:48.680 but like just knowing like at certain points

00:22:50.500 there's amount of effort that's gonna be invested

00:22:52.680 in getting to that next stage.

00:22:54.260 And I'd rather make sure that we're on the same page

00:22:56.640 and just go off, code it, and have to rework it.

00:22:59.060 Yeah, of course, yeah.

00:23:00.180 So like I would say I always test for communication,

00:23:02.140 I always test for code quality, like how,

00:23:04.320 when they give it back and they're always like,

00:23:05.520 well, what do you want it to look like?

00:23:06.620 I'm saying do what you think is appropriate, right?

00:23:08.800 I give zero guidance.

00:23:10.360 Truthfully, that's probably most accurate

00:23:12.160 to how it's going to be working together.

00:23:13.940 Right.

00:23:14.780 Well, as a non-coder, yeah.

00:23:15.860 Yeah, as a non-coder, I don't know.

00:23:17.100 You're going to want it, I don't know.

00:23:18.260 I'm going to trust that you're going to make the best.

00:23:19.600 Now, what you want to do on the back end, though,

00:23:21.540 is have an advisory board to do the code reviews.

00:23:25.260 Yeah, there's a couple people, yeah.

00:23:26.280 Yeah, so that's what I always did.

00:23:27.580 It's like if I was hiring somebody

00:23:28.920 in machine learning right now or AI,

00:23:30.620 I know enough to confuse people in a conversation.

00:23:34.300 I actually don't know enough to know about quality.

00:23:36.180 So I would just reach out to some of my friends and be like, hey.

00:23:38.960 And I would just say, like, hey, put your code up on GitHub.

00:23:41.880 You know, send me a private URL, and I'll have them do a code review.

00:23:44.620 Yeah, yeah, that's perfect.

00:23:45.420 Yeah, so that's a really good way.

00:23:46.920 And then, but you do want to test out the expectations up front.

00:23:51.620 So, like, I'm a big fan of asking people, like, hey, I know we're just starting this conversation,

00:23:55.420 but if we were to move forward, what would your, you know, your compensation expectations be?

00:23:59.080 and you know if they throw back a 250 a year with 20% equity you can just say

00:24:05.540 you know unfortunately we're living on two different planets and it's totally

00:24:10.300 cool and I hope somebody gives it to you because that would be fun it's just not

00:24:13.660 gonna happen here right and sometimes they'll backpedal but honestly if they

00:24:16.720 backpedal or if they threw that out there I would question what logic brought

00:24:21.460 them to that answer yeah and I and that would that would be super red flag

00:24:26.560 It's a balancing act too, right?

00:24:27.600 Because you don't want people that are deeply undervaluing themselves, or do you?

00:24:30.980 No, I do and I don't.

00:24:32.520 I want, I think that I want people to self-educate themselves.

00:24:36.960 Yeah, right.

00:24:37.140 Like, that answer is so out of whack that I would be concerned that the way they learn

00:24:42.420 to get to that answer wouldn't allow them to have the critical thinking skills that

00:24:45.820 hopefully they would have to get to their own answer on big, you know what I mean?

00:24:49.360 Yeah, yeah.

00:24:49.600 Like, on bigger issues and challenges in their work that they're going to have to do.

00:24:53.380 Yeah.

00:24:53.520 Like, hey, should we migrate to Node.js?

00:24:55.940 like these really technical nerdy things they're gonna have to go and discover how to do that right

00:25:01.300 so that would be that's why it's concerning to me again i've hired 500 plus people in my career so

00:25:06.100 it's kind of like i've seen patterns um particularly with this role right because if it's anything else

00:25:10.900 in the business i can have some sort of input on it but aside from you know that looks good versus

00:25:15.380 doesn't look good i i mean this is this you know i had to do in the early days like as a software

00:25:20.100 background like when i started hiring my first marketing people like i didn't i didn't even

00:25:23.620 you know like how do you hold marketing accountable right like what's the I mean now I could lay down

00:25:28.420 the whole you know like funnel and metrics but like it's nothing to software it's like you're

00:25:32.940 like how would you keep a CTO accountable yeah I don't know no I can tell you you know what I mean

00:25:39.080 like yeah so so it's like for every role you're gonna hire there's best practices there's patterns

00:25:45.440 there's um you know expectations that you would want to understand so that you could manage them

00:25:51.940 But the fun part, you know, what I've discovered, especially, you know, I've read a lot of business books.

00:25:58.940 I've talked, you know, I did over probably 2,000 advice kind of coaching calls now with Entrepreneurs with Clarity at 1,300 just on that platform.

00:26:08.520 Is I've started to see patterns in how to assess for talent.

00:26:15.160 Like I have friends that run manufacturing businesses.

00:26:17.340 I've never like, but yet when I, when I asked them, like, like you, you help with the training,

00:26:24.140 the implementation side, like there's best practices, right? So it's kind of neat how

00:26:27.880 at a high level you can kind of pattern match and create these models and then just apply them to

00:26:32.340 different things. So there's probably ways that you hire and test people that apply to software

00:26:36.680 that you just don't think they apply, but they absolutely apply. Yeah. Right. So because the

00:26:40.820 human dynamics piece is the same. Like they need to be the team player, sort of quintessential

00:26:44.500 team players, they need to communicate effectively, they need to be able to check in, take personal

00:26:48.000 ownership. All those things apply to human beings that I want to work with regardless of what they're

00:26:52.020 doing. But then they also, ideally, they can write code because you don't want them to just sit there

00:26:56.580 and direct. I would be concerned if they're like, I'm an architect. It's like, you're a shitty

00:27:00.840 programmer. Is that what that code means? I think so. Yeah, I'm going to go there with that one. 1.00

00:27:07.700 I just have a mean because it's people that don't want to roll their sleeves off. That's like saying

00:27:12.560 I'm a marketing strategy, my big pet peeve right now is the social media experts that

00:27:17.600 are strategists that have never driven real demand or marketing or anything.

00:27:23.640 That to me is, literally I was trying to hire somebody to run social marketing for me and

00:27:29.240 I interviewed a bunch of people and they're like, yeah, I'm really more of a strategist.

00:27:32.360 And I'm like, what have you done in the past?

00:27:33.840 They're like, nothing.

00:27:35.080 There was nothing interesting or great yet somehow they wanted to skip the implementation

00:27:40.120 side and just go to strategy.

00:27:41.460 So a bit of a pet peeve in my life right now.

00:27:43.160 Strategist has become a slightly more socially acceptable guru.

00:27:45.980 I think it is.

00:27:46.800 And it also, it allows them to not be accountable for outcome.

00:27:50.120 Right, yeah.

00:27:51.100 Like, I'm just going to draw you a map and you're going to pay me a lot of money for

00:27:53.480 that, but then you got to go do it and you'll probably do it wrong.

00:27:56.120 So I'm not accountable for you not getting the outcome you want.

00:27:58.660 Whereas I'm a big fan of technical talent.

00:28:01.860 If we bring this back to the challenges, having somebody that's built platforms that

00:28:08.680 understand like these are the hard pieces that I'm gonna work on and maybe

00:28:12.440 that's 20 30 percent of their time and the rest of it's built on developing

00:28:16.280 their team yeah nice but for somebody to just come in and say I don't want to

00:28:19.780 code anymore that would be huge red flag for me yeah and it doesn't fit for

00:28:23.680 it's like like hiring a marketing manager says I don't want to write copy 0.95

00:28:26.440 right it's like well is it because you suck well you know what I mean like how

00:28:31.660 do you not write copy it's like I don't know I write emails copy like I don't 0.96

00:28:35.120 You know, it's like, you can't, you can't, like, how do I post something on Instagram and not think about copy?

00:28:39.880 It's just a weird, it's a weird dynamic.

00:28:41.240 I think the same thing for, especially for somebody that you want to lead your technical team.

00:28:45.420 Like, like, I know CEOs of technical companies that still write code.

00:28:51.360 I think Zuckerberg still writes.

00:28:52.960 And they got to love it, right?

00:28:53.960 Yeah.

00:28:54.220 Zuckerberg's actually where I was going.

00:28:54.900 Yeah.

00:28:55.160 He just craves it, wants to do it.

00:28:56.820 Yeah, like, why would you get rid of something that you love?

00:28:58.660 What you want to do is build a team around you that's going to free up your time so you can do that thing,

00:29:02.120 especially if you're, like, you know, genius level at it.

00:29:04.660 And the truth is, on the technical side,

00:29:07.940 people that are that great are definitely 10x better

00:29:11.500 than their counterparts.

00:29:12.520 Like greatness on a technical side

00:29:14.940 is 10 times productivity.

00:29:17.200 And the reason why, and this is the most beautiful thing,

00:29:20.260 so like I'm a bit of a software nerd,

00:29:22.820 not that I'm a great programmer, I'm not,

00:29:24.780 and I know that and I'm okay with it.

00:29:26.780 Luckily I know how to hire and retain those people.

00:29:29.860 Is because there's something about the way their mind works

00:29:32.580 where they know when to invest in building tools

00:29:36.300 to help them be more efficient.

00:29:38.100 Like it's actually a beautiful thing

00:29:39.560 and I would love at some point to sit down

00:29:41.760 with some of the top engineering minds

00:29:45.040 and record their screen and narrate what I'm seeing

00:29:48.140 as somebody that knows enough to see it.

00:29:51.260 It's beautiful, it's like, I remember one time

00:29:53.060 this guy built a machine, essentially it was OCR,

00:29:57.080 character recognition, so takes an image,

00:29:59.340 I don't know if you've ever seen this,

00:30:00.180 on your iPhone you put it in front of a sign,

00:30:01.840 The sign's in Spanish, and it translates to English.

00:30:04.420 His name was Otavio, built Quest Visual, sold it to Google.

00:30:07.480 He's a friend of mine. 0.51

00:30:08.860 And when I first saw it, I thought, okay, buddy, I'm not an idiot.

00:30:12.360 I actually know code. 0.60

00:30:13.180 Show me the code.

00:30:13.860 And he pulled up the C++, which is a super nerdy technical. 0.98

00:30:16.800 And I'm like, oh, shit, this is for real. 0.95

00:30:19.820 I thought for sure it was like a gimmick. 0.95

00:30:21.380 He pre-recorded it, and it's not real, and it won't work if you change the font.

00:30:26.720 It was like super spaghetti code.

00:30:28.760 I was like, this is not real.

00:30:29.780 and as soon as he showed it to me I said well show me how you developed it and then he showed

00:30:34.620 me the um he built a separate tool like there was the code for the quest visual and then there was

00:30:40.800 a code to debug the system because what it did is it actually ran his algorithms in real time

00:30:47.120 through different he had like one pane that was for the the the changing the text to figure out

00:30:53.700 what was text yeah right he had that part and it had like a number of like how accurate it was

00:30:58.420 And then he had another pane that was like removing all the text that it found and creating

00:31:04.800 a blank slate.

00:31:07.160 It was, that's 10x development where they actually count, this is crazy, they count the

00:31:13.780 amount of times they touch their mouse.

00:31:16.920 If you touch your mouse, you're being inefficient.

00:31:18.420 If you want to see an incredible programmer, watch them work.

00:31:22.360 Their screens change and their fingers don't leave.

00:31:25.640 Some of them programming this thing called Vim, that's super nerdy, and if they're in

00:31:28.440 Vim, you know, this guy, like, that's, I mean, maybe more modern, yeah, again, 10x.

00:31:35.420 Yeah.

00:31:36.420 10x.

00:31:37.420 Chris, hopefully that was helpful.

00:31:38.420 That's hugely helpful, man.

00:31:39.420 I really appreciate it.

00:31:40.420 Awesome, man.

00:31:41.420 Appreciate you making the trip.

00:31:42.420 Thank you.

00:31:43.420 I find that Dan has not only such a broad knowledge base and skill set, but he's incredibly well

00:31:46.520 connected as well, and he has a passion for all the things that he's engaged in, so he

00:31:50.740 goes ridiculously deep on whatever you want to get into.

00:31:54.040 So for me it's that, it's the combination of passion, breadth, and depth that just makes

00:31:57.460 him a pleasure to speak with.

00:31:58.920 I think I came in with random thoughts about a couple different areas to go into, the technical

00:32:03.600 hire was sort of buried there somewhere, but being able to dig deep into that I think is

00:32:07.560 hugely useful, getting clarity around what to look for, the whole 10x thing and just

00:32:12.240 thinking about that in any other sphere isn't really a thing, you know, they're incrementally

00:32:16.220 better but understanding that that exists in the world of code is really useful and

00:32:19.700 practical.

00:32:20.700 on the specific advice you want because inevitably Dan could talk for 45 minutes about one topic

00:32:25.560 in depth and it'll all be great, but don't come think you're going to cover a bunch of

00:32:29.020 things because he's going to take you deep on one specific piece.

Dan Martell - December 17, 2017

Episode #5 How to Find the Perfect Technical Co-Founder w⧸ Chris Taylor, Founder of Actionable.co

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